529 Basics

[joenorm]

Hi all,

Can I open a 529 for my son through Vanguard and have it visible on my personal investors summary page? This is appealing to keep all my(and now his) investments visible in one place. Or do I need to open an account in his name?

thanks

[Morning Glory]

Yes. You open it in your name and list your child as the beneficiary. It shows up in your account summary beneath your other accounts.  Make sure your state tax credit rules don't require you to choose a state-specific plan. If you use Vanguard you will have the Nevada plan which is quite good, and many states either don't have a credit or don't care which plan you use, but it's worth checking first.

[mikesinWV]

I have most of my assets sitting in Vanguard but my 529 is thru West Virginia's state plan which is not managed thru Vanguard.  My contributions to these plans are a deduction for state income tax purposes.  If I contributed to another state's plan, I would not receive that deduction.  Just something to keep in mind as Morning Glory indicated.

[joenorm]

Thanks. I am in Washington State. Anyone know if there are any limitations?

[Morning Glory]

You have no state income tax, so likely no credits or deductions :)

[joenorm]

It looks like Washington has the GET program for college savings. Does anyone have experience with this program?

[secondcor521]

It looks like Washington has the GET program for college savings. Does anyone have experience with this program?

Batsignal @lhamo ?

[nereo]

Thanks. I am in Washington State. Anyone know if there are any limitations?

just to be clear, you do not need to open a 529 in the state where you reside. Some states plans offer better options than others, so do your homework.

[lhamo]

It looks like Washington has the GET program for college savings. Does anyone have experience with this program?

Batsignal @lhamo ?

Personally I would not do GET -- a regular 529 is going to offer you much more flexibility and investment options.

We were New York residents when we opened our first 529 for our DS.  The New York State plan is managed by Vanguard, and we have been pleased with the results (we got very good returns largely because I threw a huge chunk into both kids funds in 2009-10 when the market was down).  One annoyance is that they tend to steer you into "target date" type funds -- I'm not even sure if you can buy individual funds at all easily.  But you can read the prospectuses to see how those are comprised and see which risk level you are comfortable with.

It's probably a long way off for you guys and no telling if the rules will be the same, but if you anticipate being able to control your on-paper income to appear low income from middle school on look into the College Bound Scholarship program, as well as the other income limits for in-state school programs.  We decided to live off savings for the last several years and have had very low on paper income as a result.  DD was admitted to the UW with essentially a full ride offer -- no loans but a small chunk of federal work study -- based on our FAFSA EFC of $0.  Portions of that funding come from both the College Bound scholarship and the Washington State Opportunity Scholarship (for STEM majors), both of which include enhanced opportunities for career prep such as targeted training and internship programs.   

[jeninco]

Wanted to hop in to say "read the small print, and pay attention!"

My aunt funded the Virginia pre-paid plan for all 4 of her nieces and nephews, and at the time when she opened the accounts (around 20 years ago) the promise was "full tuition in the state of VA, or the equivalent amount of you go elsewhere." Somewhere along the way, that changed to "if you go elsewhere, you get a pre-determined rate of return", which is way, way less than the market changed over that time -- it would've been much better to just put it into index funds. Since she was a poorly-paid high-school teacher all along, she was particularly pissed!

[seattlecyclone]

It looks like Washington has the GET program for college savings. Does anyone have experience with this program?

I'm in Washington. We have Vanguard 529s for our kids. No state tax reason to pick one 529 over another, so I went with the Vanguard one to have it all visible in the same place as much of the rest of our investments.

I have not enrolled in GET. Last time I looked into it they would charge significantly more for a tuition "unit" than the current payoff value—essentially by buying into GET you were making a bet that tuition inflation would be high enough to overcome this markup plus any growth in your investments in the meantime. This seemed like a poor bet to me. Looking into it now they're not currently charging any markup over the current payoff value so it's much less of a bad deal.

I still personally am not planning to buy in, largely for political reasons. We're (as a society) starting to realize how high tuition and student loans are really holding young people back in life, and so I predict there will be a concerted political effort to keep public university tuition increases as low as possible in the medium term. If that comes to pass, GET will prove to be a poor investment. You might have different predictions that lead you to evaluate this option differently.